Godrej Industries posts Rs42.31 crore loss for December quarter

Mumbai, Feb. 14 -- Godrej Industries Ltd, one of the Godrej group holding companies, Tuesday posted a Rs42.31 crore standalone loss for the December quarter against a Rs49.42 crore profit a year ago, even as sales rose.
Total revenue increased 30.34% to Rs410.52 crore from a year ago.
The company's finance costs rose 25.7% from a year ago to touch Rs52.78 crore. Godrej also posted a loss before interest and tax of Rs24.72 crore in the 'other' business, up 45% year-on-year. This segment includes integrated poultry, tissue culture, seeds, windmill energy generation, and gourmet and fine foods.
On a consolidated basis, the company posted a Rs89.95 crore net profit, down 15.1% from a year ago. However, in a statement, the company said that consolidated results for this quarter were not comparable with previous quarters because of "changes in the shareholdings during the period in some of the subsidiaries, joint ventures, and associates."
"The best way to look at this company is on a sum of the parts basis," an analyst with an equities brokerage firm said, requesting anonymity. "The bulk of Godrej Industries's holdings are in Godrej's consumer business, Godrej Properties, and Godrej Agrovet. These are all fast-growing companies, and GIL's market cap is equal to the market value of its shares in both the listed entities it holds-GCPL, and Godrej Properties," he said.
Godrej Industries currently holds 23.8% of Godrej Consumer Products and 56.7% of Godrej Properties, as per a company investor update released Tuesday.
"The star business in Godrej Industries' stable is Godrej Agrovet, their agriculture business," the analyst said. "It has been growing at 25-30% CAGR." Godrej Industries said this division posted an 18% growth in revenue and 369% growth in profit before tax (without exceptional items) year-on-year. The subsidiary has interests in animal feeds, oil palm, agri inputs, and life sciences, whose revenues grew steadily in the past three quarters. The agri-inputs grew fastest at 26% year-on-year.
Brokerage firm Axis Capital in an October report had pointed out that Godrej Industries's market cap is largely derived from its holdings in the listed properties and consumer businesses, ignoring the value generated by Agrovet, the company's agri-chem business. Axis Capital estimated that Agrovet will be worth Rs7,000 crore by end of FY2018 and will be worth Rs14,000 crore by 2021, close to GIL's current market cap of Rs17,409 crore.
Shares of Godrej Industries closed 0.09% higher at Rs516.50 on the BSE on Tuesday, while the benchmark Sensex closed lower by 12 points, or 0.04%, at 28,339 points.